Skepticism
September 23, 2008 – 11:25 pm by BHRyan Avent offers lots of wisdom and debunks some of the silliness of David Cay Johnson (the Bellows):
But what about things like credit cards and revolving business loans? Look, if we get to the point where banks are restricting basic credit lines on which nearly all Americans depend for use in daily life, then we’re beyond recession territory–we’re in depression territory. And it’s not like things weren’t heading in that direction. Last week we were all sitting there watching the crisis progress from one institution to the next. Now that the blaze on the bottom floor is under control, people are like, “but we don’t know that it would have spread to the top floor!” And it’s not as if the threat has entirely diminished. Days after the bailout was announced, the spread between interbank lending rates and rates on loans from the government is some five times higher than it would be under normal circumstances. That’s huge. And it rose on Monday and Tuesday after falling over the weekend.
